US inflation could hit the Federal Reserve’s 2% target in 2025, Bank of America CEO Brian Moynihan told CNN in an exclusive interview Tuesday.
“We think it will take [Fed officials] all of this year and all of next year and into 2025 before they get inflation in line with their long term target,” Moynihan told CNN’s Poppy Harlow on “CNN This Morning.”
The Fed is currently projecting an inflation rate of 2.1% that year, down from the current level of 4.4%.
Already, consumers are cutting back on spending to a level that is consistent with 2% inflation, Moynihan said, citing Bank of America customer data.
That’s both “good and bad,” he added. “Good in that’s what the Fed needs to see inflation under control. Not so good because it does mean we have a higher probability of a mild recession coming true.”
Moynihan said he thinks the Fed could raise rates “a couple more times this year” to get inflation closer to its target. He also predicts the Fed will then hold rates steady until May of next year before cutting. That’s in line with traders’ forecasts, according to the CME FedWatch Tool. But around a fifth of traders think a rate cut could come in March 2024.
Source: edition.cnn.com
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